Sinomax Group (01418) has released an announcement that on June 17, 2024 (after trading hours), its indirect wholly-owned subsidiary, Sinomax Vietnam HP (as tenant), entered into a factory lease agreement with Lam Thanh (as landlord). Accordingly, Lam Thanh has agreed to lease the said property to Sinomax Vietnam HP for a term of three years from September 1, 2024 to August 31, 2027. The total monthly rent of the property (excluding value-added tax and public utility charges) is approximately USD 90,300 for the first two years of the lease term and approximately USD 99,200 for the third year of the lease term.

The property, which is a ready-made factory, office, dormitory, and other supporting facilities located on the construction site, includes: (i) a factory occupying an area of 23,349.5 square meters; (ii) offices and dormitories occupying an area of 1,654.7 square meters; and (iii) supporting facilities occupying an area of 1,008.70 square meters.

The Group has been leasing properties in the vicinity of the property for use as its production facilities in Vietnam (where the Group produces end-consumer health and household products). Since 2019, the Group has invested in the construction of factories and supporting facilities in the vicinity of the Tan Binh Industrial Park to meet its operational needs. In order to expand the Group's business operations in Vietnam, the Board of Directors believes that the Group has a need to lease the property.

After considering (including) (i) that entering into a factory lease agreement would enable the Group to promote its business activities on the construction site adjacent to other production facilities in the Tan Binh Industrial Park; and (ii) that the rent payable by Sinomax Vietnam HP under the factory lease agreement is comparable to the current market rent of comparable properties in the vicinity, the Directors (including independent non-executive Directors) believe that the terms of the factory lease agreement were negotiated on a fair basis and were concluded on normal commercial terms, are fair and reasonable, and are in the overall interests of the Company and its shareholders.